How much money do I need to retire?

What does your retirement look like and can you afford to retire?

It’s no surprise that everyone’s retirement needs and expectations are different. Retirement poses the rare opportunity to have both the time and financial means to do as you choose. Travel to that longed-for destination, practice that golf swing or is it the time to enjoy family and friends. Ensuring that you have the financial security to support those goals will allow you to live the retirement you desire as well as removing the uncertainty and stress that comes with a significant life change.

Most people understand that they will need to use their superannuation assets to fund their retirement and yet have never looked at their balance. They wait for the day they retire to have a conversation about how they will fund it, believing that they can always access the aged pension. Unfortunately, the aged pension alone is often insufficient to provide even the most basic of living standards.

As a guide, the Association of Superannuation funds of Australian (ASFA) found that a couple requires $60,457 and a single $44,011 of yearly income to support a ‘comfortable lifestyle’ assuming you own your home outright.

How much you’ll need in retirement will depend on your circumstances and the type of lifestyle you’re after. Understanding and having a conversation about what you want in retirement and how you will fund that is imperative. Ask yourself:

  • Do you want to travel?
  • Do you want to support your children and grandchildren?
  • Do you want to retire early?
  • Are you willing to downsize the family home?
  • Are you willing to supplement your income by working longer?

It’s also important to consider beyond the early stages of retirement, considering the potential impact of Aged Care and your changing health conditions.

Once you have an understanding of the level of income you will require throughout retirement, you can begin to develop a strategy to retire with financial security. You may need to make additional superannuation contributions or consider different investment vehicles and strategies that compliment your retirement objectives.

How much money you need to retire will be dependent on what is important to you and your goals for retirement. The Association of Superannuation Funds of Australia figures are not applicable to everyone and simply act as a guide.

If you’d like to discuss you current situation or any points in this article further, please contact one of our Financial Specialists today. Alternatively, you can complete your details below and we’ll be in touch or give us a call on (03) 9835 8200.

DISCLAIMER:  GENERAL ADVICE ONLY

The information provided in this blog is general in nature. It has been prepared without taking into account any person’s individual objectives, financial situation or needs.

Before acting on any information in this blog, you should consider its appropriateness to you, having regard to your objectives, financial situation and needs or seek professional advice from a financial advisor.

Accru are not recommending any investment or product, the investments mentioned are examples only. Please seek professional advice or do you own research for an appropriate investment.  

About the Author
David La Terra , Melbourne
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